Other parts of this series:
Insurers that fail to provide their customers with hyper-relevant products and experiences are likely to pay a big price.
Insurers across the world are coming under increasing pressure from their customers to become more relevant and appealing.
Property and casualty carriers, for example, lost an estimated US$168 billion in 2018 because their customers turned to other insurance providers they believed better met their requirements. Around 62 percent of insurance customers who switched to another carrier last year did so because they thought their former provider wasn’t sufficiently relevant. What’s more, nearly a third of insurance customers claim they would stop doing business with an insurer that was no longer relevant.
To achieve the hyper-relevance required to satisfy the ever-changing whims of today’s customers, insurers need to transform themselves into “Living Businesses”. As I mentioned in my previous blog post, these Living Businesses combine physical and digital channels to give customers constantly relevant services and experiences. Only a few insurers have, as yet, managed to change themselves into Living Businesses.
How should insurers go about becoming Living Businesses? We took a close look at 30 Living Businesses in the financial services sector (13 insurers and 17 banks) to identify what sets them apart from their competitors. We noticed that all these top-performing companies recognize that their customers enjoy highly-relevant, dynamic, real-time experiences when dealing with leading service providers in other industries. They understand that their customers expect them to deliver experiences of similar quality. By contrast, only 70 percent of financial services companies that are not Living Businesses appreciate the craving for hyper-relevant services among their customers. Even fewer of these firms have begun raising the quality of the experience they provide so that it comes close to matching the offerings of innovators in other industries, such as Amazon, Netflix and Apple.
“Living Businesses believe they need to keep reinventing themselves to be successful in today’s increasingly digital and disrupted marketplace.”
Furthermore, all the insurers we identified as Living Businesses believe they need to keep reinventing themselves to be successful in today’s increasingly digital and disrupted marketplace. Only 68 percent of other insurers agreed. Similarly, the 13 insurers that have become Living Businesses all recognize that they need to be more agile and dynamic than they were three years ago. Only 86 percent of insurers with traditional business models concurred.
To become successful Living Businesses, insurers need to quickly close the gap between the rising expectations of their customers and the levels of service their organizations can deliver. They can achieve this alignment by addressing five key areas of their businesses. Three of them I discussed in my previous blog post:
- Targeting emerging opportunities.
- Designing products and services around the needs of customers.
- Rewiring business and organizational culture.
These are the areas where insurers that have become Living Businesses typically excel. However, there are two more hot spots that these insurers often underestimate. Nonetheless, when tackled properly they can help organizations dramatically improve their customer relevance.
- Building engagement channels: Use agile technology platforms to roll out highly-relevant customer experiences, quickly scale up promising consumer projects, and optimize operations to ensure that products and services become more relevant to customers across all distribution channels.
- Scaling platforms and ecosystems: Collaborate with partners beyond traditional industry boundaries and use cloud technology to provide employees and partners with essential customer data quickly and securely.
In my next blog post, I’ll describe how one insurer that has become a Living Business, a well-established international carrier, has transformed itself to become a successful customer-centric organization. In the meantime, have a look at this link. I’m sure you’ll find it useful.